A major part of any yield curve is inflation expectations. Nominal growth particularly toward the longer end of curves sets the agenda for trading. But further out there are several confluences that may cause distortions. For Economists, these are conundrums. There are times, however, when curve dynamics remain pretty simple. These are not usually the best of times. As my [...]
This year, we've got T-bills and Trump. Two years ago, it was 2a7 and money market funds. I wrote on this day in 2016: Since that point, encompassing both liquidation waves in August and then January and February 2016, the TED spread has been on a more determined upward track as well as being more much, much more volatile as [...]
On August 9, 2007, the eurodollar system cracked. Over the eleven years since that day, the crack has only become enlarged. No amount of QE nor the bank reserves those produced has been able to patch the system back up into functioning condition. The thing lingers on, limping forward through small ups and more serious downturns. One step forward, two [...]
Why is SHIBOR falling from an economic perspective? Simple again. China’s growth both on its own and as a reflection of actual global growth has stalled. And in a dynamic, non-linear world stalled equals trouble. Going all the way back to early 2017, there’s been no acceleration (and more than a little deceleration). The reflation economy got started in 2016 [...]
Globally synchronized growth has taken a beating so far in 2018. As a narrative, one factor after another has turned against it. Europe was booming and was even going to be in a leadership position for the global economy. Now? Not so much. The dollar would continue to fall just as it did in the years before Bear Stearns, a [...]
During the decade of the seventies, there was an opening. The Bretton Woods system had largely failed in 1960, but gold exchange lingered onward until August of 1971. Long before President Nixon acted in defaulting on US obligations, however, global currency liquidity had increasingly been supplied through other means. Those “other” means was an offshore ecosystem that though rudimentary compared [...]
Americans are eschewing credit cards in 2018. Outside of a big jump in revolving credit balances in May, through June 2018 the Federal Reserve reports only small gains in the total aggregate balance. Given, however, the propensity of this data to be significantly revised, we can’t really be sure as to what’s happened. With the data we have now, there [...]
June was a good month for Japanese workers. Real wages rose at the fastest pace in eight years, jumping nearly 3% for the first time since 2010. The data, reported by the Japanese Ministry of Health, Labor, and Welfare, was the first piece of positive economic news in some time. As you might expect, the wage figures are being taken [...]
I’ve seen a lot of commentary lately describe conditions as if things are calmed down. There was a bit of growth scare, a little T-bill indigestion earlier in the year. The Chinese are somehow both stimulating their export sector by devaluing CNY, and also controlling the price of gold while they do it. The contradictory inflation/deflation signals have apparently just [...]
In October 2015, former Federal Reserve Chairman Ben Bernanke took to the pages of the Wall Street Journal. Pedigree matters, a fact easily established by how easy it is for central bankers and former central bankers to have their thoughts published in any mainstream outlet of their choosing. Record doesn’t mean so much, performance on the job secondary at most [...]
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